BILL NUMBER: AB 198	CHAPTERED  09/21/99

	CHAPTER   437
	FILED WITH SECRETARY OF STATE   SEPTEMBER 21, 1999
	APPROVED BY GOVERNOR   SEPTEMBER 21, 1999
	PASSED THE ASSEMBLY   AUGUST 26, 1999
	PASSED THE SENATE   AUGUST 23, 1999
	AMENDED IN SENATE   JULY 6, 1999
	AMENDED IN SENATE   JUNE 10, 1999

INTRODUCED BY   Assembly Member Ackerman

                        JANUARY 21, 1999

   An act to amend Sections 160, 168, 174.5, 175, 181, 1001, 1100,
1101, 1101.1, 1109, 1113, 1200, 1201, 6010, 6020, 6021, 6022, 8010,
8020, 8021, 8022, 9640, 12530, 12550, 12551, 12552, 15679.1, 16901,
16911, 16914, 16915, 16916, and 17600 of, and to add Sections 5063.5,
5064.5, 6019.1, 8019.1, 12242.5, 12242.6, and 12540.1 to, the
Corporations Code, relating to legal entities.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 198, Ackerman.  Legal entities:  organization and operation.
   Existing provisions of law provide for the merger of 2 or more
corporations.
   This bill would authorize corporations, including nonprofit
corporations and cooperative corporations to merge directly with any
other business entity defined to mean a domestic or foreign limited
liability company, limited partnership, general partnership, business
trust, real estate investment trust, unincorporated association,
other than a nonprofit association, or a domestic reciprocal insurer
organized after 1974 to provide medical malpractice insurance.  The
bill would revise and recast other provisions, would enact related
provisions with respect to merger authority that are applicable to
partnerships, limited partnerships, and limited liability companies,
and would make various technical and other related changes.
   This bill would incorporate additional changes to Sections 15679.1
and 17600 of the Corporations Code proposed by AB 197, to be
operative only if this bill and AB 197 are both enacted and become
effective on or before January 1, 2000, and this bill is enacted
last.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 160 of the Corporations Code is amended to
read:
   160.  (a) Except as provided in subdivision (b), "control" means
the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a corporation.
   (b) "Control" in Sections 181, 1001, and 1200 means the ownership
directly or indirectly of shares or equity securities possessing more
than 50 percent of the voting power of a domestic corporation, a
foreign corporation, or an other business entity.
  SEC. 2.  Section 168 of the Corporations Code is amended to read:
   168.  "Equity security" in Sections 181, 1001, 1113, 1200, and
1201 means any share or membership of a domestic or foreign
corporation; any partnership interest, membership interest, or
equivalent equity interest in an other business entity; and any
security convertible with or without consideration into, or any
warrant or right to subscribe to or purchase, any of the foregoing.

  SEC. 3.  Section 174.5 of the Corporations Code is amended to read:

   174.5.  "Other business entity" means a domestic or foreign
limited liability company, limited partnership, general partnership,
business trust, real estate investment trust, unincorporated
association (other than a nonprofit association), or a domestic
reciprocal insurer organized after 1974 to provide medical
malpractice insurance as set forth in Article 16 (commencing with
Section 1550) of Chapter 3 of Part 2 of Division 1 of the Insurance
Code.  As used herein, "general partnership" means a "partnership" as
defined in subdivision (7) of Section 16101; "business trust" means
a business organization formed as a trust; "real estate investment
trust" means a "real estate investment trust" as defined in
subsection (a) of Section 856 of the Internal Revenue Code of 1986,
as amended; and "unincorporated association" has the meaning set
forth in Section 24000.
  SEC. 4.  Section 175 of the Corporations Code is amended to read:
   175.  Except as used in Sections 1001, 1101, and 1113, a "parent"
of a specified corporation is an affiliate in control (Section 160
(a)) of that corporation directly or indirectly through one or more
intermediaries.  In Sections 1001, 1101, and 1113, "parent" means a
person in control (Section 160(b)) of a domestic corporation, a
foreign corporation, or an other business entity.
  SEC. 5.  Section 181 of the Corporations Code is amended to read:
   181.  "Reorganization" means either:
   (a) A merger pursuant to Chapter 11 (commencing with Section 1100)
other than a short-form merger (a "merger reorganization").
   (b) The acquisition by one domestic corporation, foreign
corporation, or other business entity in exchange, in whole or in
part, for its equity securities (or the equity securities of a
domestic corporation, a foreign corporation, or an other business
entity which is in control of the acquiring entity) of equity
securities of another domestic corporation, foreign corporation, or
other business entity if, immediately after the acquisition, the
acquiring entity has control of the other entity (an "exchange
reorganization").
   (c) The acquisition by one domestic corporation, foreign
corporation, or other business entity in exchange in whole or in part
for its equity securities (or the equity securities of a domestic
corporation, a foreign corporation, or an other business entity which
is in control of the acquiring entity) or for its debt securities
(or debt securities of a domestic corporation, foreign corporation,
or other business entity which is in control of the acquiring entity)
which are not adequately secured and which have a maturity date in
excess of five years after the consummation of the reorganization, or
both, of all or substantially all of the assets of another domestic
corporation, foreign corporation, or other business entity (a
"sale-of-assets reorganization").
  SEC. 6.  Section 1001 of the Corporations Code is amended to read:

   1001.  (a) A corporation may sell, lease, convey, exchange,
transfer, or otherwise dispose of all or substantially all of its
assets when the principal terms are approved by the board, and,
unless the transaction is in the usual and regular course of its
business, approved by the outstanding shares (Section 152), either
before or after approval by the board and before or after the
transaction.  A transaction constituting a reorganization (Section
181) is subject to the provisions of Chapter 12 (commencing with
Section 1200) and not this section (other than subdivision (d)).
   (b) Notwithstanding approval of the outstanding shares (Section
152), the board may abandon the proposed transaction without further
action by the shareholders, subject to the contractual rights, if
any, of third parties.
   (c) The sale, lease, conveyance, exchange, transfer or other
disposition may be made upon those terms and conditions and for that
consideration as the board may deem in the best interests of the
corporation.  The consideration may be money, securities, or other
property.
   (d) If the acquiring party in a transaction pursuant to
subdivision (a) of this section or subdivision (g) of Section 2001 is
in control of or under common control with the disposing
corporation, the principal terms of the sale must be approved by at
least 90 percent of the voting power of the disposing corporation
unless the disposition is to a domestic or foreign corporation or
other business entity in consideration of the nonredeemable common
shares or nonredeemable equity securities of the acquiring party or
its parent.
   (e) Subdivision (d) does not apply to any transaction if the
Commissioner of Corporations, the Commissioner of Financial
Institutions, the Insurance Commissioner or the Public Utilities
Commission has approved the terms and conditions of the transaction
and the fairness of those terms and conditions pursuant to Section
25142, Section 696.5 of the Financial Code, Section 838.5 of the
Insurance Code, or Section 822 of the Public Utilities Code.
  SEC. 7.  Section 1100 of the Corporations Code is amended to read:

   1100.  Any two or more corporations may be merged into one of
those corporations.  A corporation may merge with one or more
domestic corporations (Section 167), foreign corporations (Section
171), or other business entities (Section 174.5) pursuant to this
chapter.  Mergers in which a foreign corporation but no other
business entity is a constituent party are governed by Section 1108,
and mergers in which an other business entity is a constituent party
are governed by Section 1113.
  SEC. 8.  Section 1101 of the Corporations Code is amended to read:

   1101.  The board of each corporation which desires to merge shall
approve an agreement of merger.  The constituent corporations shall
be parties to the agreement of merger and other persons, including a
parent party (Section 1200), may be parties to the agreement of
merger.  The agreement shall state all of the following:
   (a) The terms and conditions of the merger.
   (b) The amendments, subject to Sections 900 and 907, to the
articles of the surviving corporation to be effected by the merger,
if any.  If any amendment changes the name of the surviving
corporation the new name may be the same as or similar to the name of
a disappearing domestic or foreign corporation, subject to
subdivision (b) of Section 201.
   (c) The name and place of incorporation of each constituent
corporation and which of the constituent corporations is the
surviving corporation.
   (d) The manner of converting the shares of each of the constituent
corporations into shares or other securities of the surviving
corporation and, if any shares of any of the constituent corporations
are not to be converted solely into shares or other securities of
the surviving corporation, the cash, rights, securities, or other
property which the holders of those shares are to receive in exchange
for the shares, which cash, rights, securities, or other property
may be in addition to or in lieu of shares or other securities of the
surviving corporation, or that the shares are canceled without
consideration.
   (e) Other details or provisions as are desired, if any, including,
without limitation, a provision for the payment of cash in lieu of
fractional shares or for any other arrangement with respect thereto
consistent with the provisions of Section 407.
   Each share of the same class or series of any constituent
corporation (other than the cancellation of shares held by a
constituent corporation or its parent or a wholly owned subsidiary of
either in another constituent corporation) shall, unless all
shareholders of the class or series consent and except as provided in
Section 407, be treated equally with respect to any distribution of
cash, rights, securities, or other property.  Notwithstanding
subdivision (d), except in a short-form merger, and in the merger of
a corporation into its subsidiary in which it owns at least 90
percent of the outstanding shares of each class, the nonredeemable
common shares or nonredeemable equity securities of a constituent
corporation may be converted only into nonredeemable common shares of
the surviving party or a parent party if a constituent corporation
or its parent owns, directly or indirectly, prior to the merger
shares of another constituent corporation representing more than 50
percent of the voting power of the other constituent corporation
prior to the merger, unless all of the shareholders of the class
consent and except as provided in Section 407.
  SEC. 9.  Section 1101.1 of the Corporations Code is amended to
read:
   1101.1.  Subdivision (c) of Section 1113 and the last two
sentences of Section 1101 do not apply to any transaction if the
Commissioner of Corporations, the Commissioner of Financial
Institutions, the Insurance Commissioner or, the Public Utilities
Commission has approved the terms and conditions of the transaction
and the fairness of those terms and conditions pursuant to Section
25142 or Section 696.5, 5750, or 5802 of the Financial Code, Section
838.5 of the Insurance Code, or Section 822 of the Public Utilities
Code.
  SEC. 9.5.  Section 1109 of the Corporations Code is amended to
read:
   1109.  Whenever a domestic or foreign corporation or domestic or
foreign other business entity having any real property in this state
merges or consolidates with another domestic or foreign corporation
or other business entity pursuant to the laws of this state or of the
state or place in which any constituent party to the merger was
incorporated or organized, and the laws of the state or place of
incorporation or organization (including this state) of any
disappearing party to the merger provide substantially that the
making and filing of the agreement of merger or consolidation or
certificate of ownership or certificate of merger vests in the
surviving or consolidated party to the merger all the real property
of any disappearing party to the merger, the filing for record in the
office of the county recorder of any county in this state in which
any of the real property of that disappearing party to the merger is
located of a copy of the agreement of merger or consolidation or
certificate of ownership or certificate of merger, certified by the
Secretary of State or an authorized public official of the state or
place pursuant to the laws of which the merger or consolidation is
effected, shall evidence record ownership in the surviving or
consolidated party to the merger, of all interest of the disappearing
party to the merger in and to the real property located in that
county.
  SEC. 10.  Section 1113 of the Corporations Code is amended to read:

   1113.  (a) Any one or more corporations may merge with one or more
other business entities (Section 174.5).  One or more domestic
corporations (Section 167) not organized under this division and one
or more foreign corporations (Section 171) may be parties to the
merger.  Notwithstanding the provisions of this section, the merger
of any number of corporations with any number of other business
entities may be effected only if:
   (1) In a merger in which a domestic corporation not organized
under this division or a domestic other business entity is a party,
it is authorized by the laws under which it is organized to effect
the merger.
   (2) In a merger in which a foreign corporation is a party, it is
authorized by the laws under which it is organized to effect the
merger.
   (3) In a merger in which a foreign other business entity is a
party, it is authorized by the laws under which it is organized to
effect the merger.
   (b) Each corporation and each other party which desires to merge
shall approve, and shall be a party to, an agreement of merger.
Other persons, including a parent party (Section 1200), may be
parties to the agreement of merger.  The board of each corporation
which desires to merge, and, if required the shareholders, shall
approve the agreement of merger.  The agreement of merger shall be
approved on behalf of each party by those persons required to approve
the merger by the laws under which it is organized.   The agreement
of merger shall state:
   (1) The terms and conditions of the merger.
   (2) The name and place of incorporation or organization of each
party to the merger and the identity of the surviving party.
   (3) The amendments, if any, subject to Sections 900 and 907, to
the articles of the surviving corporation, if applicable, to be
effected by the merger.  If any amendment changes the name of the
surviving corporation, if applicable, the new name may be, subject to
subdivision (b) of Section 201, the same as or similar to the name
of a disappearing party to the merger.
   (4) The manner of converting the shares of each constituent
corporation into shares, interests, or other securities of the
surviving party.  If any shares of any constituent corporation are
not to be converted solely into shares, interests or other securities
of the surviving party, the agreement of merger shall state (i) the
cash, rights, securities,  or other property which the holders of
those shares are to receive in exchange for the shares, which cash,
rights, securities, or other property may be in addition to or in
lieu of shares, interests or other securities of the surviving party,
or (ii) that the shares are canceled without consideration.
   (5) Any other details or provisions required by the laws under
which any party to the merger is organized, including, if a public
benefit corporation or a religious corporation is a party to the
merger, Section 6019.1, or, if a mutual benefit corporation is a
party to the merger, Section 8019.1, or, if a consumer cooperative
corporation is a party to the merger, Section 12540.1, or, if a
domestic limited partnership is a party to the merger, Section
15678.2, or, if a domestic partnership is a party to the merger,
Section 16911, or, if a domestic limited liability company is a party
to the merger, Section 17551.
   (6) Any other details or provisions as are desired, including,
without limitation, a provision for the payment of cash in lieu of
fractional shares or for any other arrangement with respect thereto
consistent with the provisions of Section 407.
   (c) Each share of the same class or series of any constituent
corporation (other than the cancellation of shares held by a party to
  the merger or its parent, or a wholly owned subsidiary of either,
in another constituent corporation) shall, unless all shareholders of
the class or series consent and except as provided in Section 407,
be treated equally with respect to any distribution of cash, rights,
securities, or other property.  Notwithstanding paragraph (4) of
subdivision (b), the nonredeemable common shares of a constituent
corporation may be converted only into nonredeemable common shares of
a surviving corporation or a parent party (Section 1200) or
nonredeemable equity securities of a surviving party other than a
corporation if another party to the merger or its parent owns,
directly or indirectly, prior to the merger shares of that
corporation representing more than 50 percent of the voting power of
that corporation, unless all of the shareholders of the class consent
and except as provided in Section 407.
   (d) Notwithstanding its prior approval, an agreement of merger may
be amended prior to the filing of the agreement of merger or the
certificate of merger, as is applicable, if the amendment is approved
by the board of each constituent corporation and, if the amendment
changes any of the principal terms of the agreement, by the
outstanding shares (Section 152), if required by Chapter 12
(commencing with Section 1200), in the same manner as the original
agreement of merger.  If the agreement of merger as so amended and
approved is also approved by each of the other parties to the
agreement of merger, the agreement of merger as so amended shall then
constitute the agreement of merger.
   (e) The board of a constituent corporation may, in its discretion,
abandon a merger, subject to the contractual rights, if any, of
third parties, including other parties to the agreement of merger,
without further approval by the outstanding shares (Section 152), at
any time before the merger is effective.
   (f) Each constituent corporation shall sign the agreement of
merger by its chairperson of the board, president or a vice president
and also by its secretary or an assistant secretary acting on behalf
of their respective corporations.
   (g) (1) If the surviving party is a corporation or a foreign
corporation, or if a public benefit corporation (Section 5060), a
mutual benefit corporation (Section 5059), a religious corporation
(Section 5061), or a corporation organized under the Consumer
Cooperative Corporation Law (Section 12200) is a party to the merger,
after required approvals of the merger by each constituent
corporation through approval of the board (Section 151) and any
approval of the outstanding shares (Section 152) required by Chapter
12 (commencing with Section 1200) and by the other parties to the
merger, the surviving party shall file a copy of the agreement of
merger with an officers' certificate of each constituent domestic and
foreign corporation attached stating the total number of outstanding
shares or membership interests of each class entitled to vote on the
merger (and identifying any other person or persons whose approval
is required), that the agreement of merger in the form attached or
its principal terms, as required, were approved by that corporation
by a vote of a number of shares or membership interests of each class
which equaled or exceeded the vote required, specifying each class
entitled to vote and the percentage vote required of each class and,
if applicable, by such other person or persons whose approval is
required, or that the merger agreement was entitled to be and was
approved by the board alone (as provided in Section 1201, in the case
of corporations subject to that section).  If equity securities of a
parent party (Section 1200) are to be issued in the merger, the
officer's certificate of that controlled party shall state either
that no vote of the shareholders of the parent party was required or
that the required vote was obtained.  In lieu of an officers'
certificate, a certificate of merger, on a form prescribed by the
Secretary of State, shall be filed for each constituent other
business entity.  The certificate of merger shall be executed and
acknowledged by each domestic constituent limited liability company
by all managers of the limited liability company (unless a lesser
number is specified in its articles or organization or operating
agreement) and by each domestic constituent limited partnership by
all general partners (unless a lesser number is provided in its
certificate of limited partnership or partnership agreement) and by
each domestic constituent general partnership by two partners (unless
a lesser number is provided in its partnership agreement) and by
each foreign constituent limited liability company by one or more
managers and by each foreign constituent general partnership or
foreign constituent limited partnership by one or more general
partners, and by each constituent reciprocal insurer by the
chairperson of the board, president, or vice president, and by the
secretary or assistant secretary, or, if a constituent reciprocal
insurer has not appointed those officers, by the chairperson of the
board, president, or vice president, and by the secretary or
assistant secretary of the constituent reciprocal insurer's
attorney-in-fact, and by each other party to the merger by those
persons required or authorized to execute the certificate of merger
by the laws under which that party is organized, specifying for that
party the provision of law or other basis for the authority of the
signing persons.  The certificate of merger shall set forth, if a
vote of the shareholders, members, partners, or other holders of
interests of the constituent other business entity was required, a
statement setting forth the total number of outstanding interests of
each class entitled to vote on the merger and that the agreement of
merger in the form attached or its principal terms, as required, were
approved by a vote of the number of interests of each class which
equaled or exceeded the vote required, specifying each class entitled
to vote and the percentage vote required of each class, and any
other information required to be set forth under the laws under which
the constituent other business entity is organized, including, if a
domestic limited partnership is a party to the merger, subdivision
(a) of Section 15678.4, if a domestic partnership is a party to the
merger, subdivision (b) of Section 16915, and, if a domestic limited
liability company is a party to the merger, subdivision (a) of
Section 17552.  The certificate of merger for each constituent
foreign other business entity, if any, shall also set forth the
statutory or other basis under which that foreign other business
entity is authorized by the laws under which it is organized to
effect the merger.  The merger and any amendment of the articles of
the surviving corporation, if applicable, contained in the agreement
of merger shall be effective upon filing of the agreement of merger
with an officer's certificate of each constituent domestic and
foreign corporation and a certificate of merger for each constituent
other business entity, subject to subdivision (c) of Section 110 and
subject to the provisions of subdivision (j), and the several parties
thereto shall be one entity.  The agreement of merger shall not be
filed, however, until there has been filed by or on behalf of each
party to the merger taxed under the Bank and Corporation Tax Law, the
existence of which is terminated by the merger, the certificate of
satisfaction of the Franchise Tax Board that all taxes imposed by
that law have been paid or secured.  If a domestic reciprocal insurer
organized after 1974 to provide medical malpractice insurance is a
party to the merger, the agreement of merger or certificate of merger
shall not be filed until there has been filed the certificate issued
by the Insurance Commissioner approving the merger pursuant to
Section 1555 of the Insurance Code.  The Secretary of State may
certify a copy of the agreement of merger separate from the officers'
certificates and certificates of merger attached thereto.
   (2) If the surviving entity is an other business entity, and no
public benefit corporation (Section 5060), mutual benefit corporation
(Section 5059), religious corporation (Section 5061), or corporation
organized under the Consumer Cooperative Corporation Law (Section
12200) is a party to the merger, after required approvals of the
merger by each constituent corporation through approval of the board
(Section 151) and any approval of the outstanding shares (Section
152) required by Chapter 12 (commencing with Section 1200) and by the
other parties to the merger, the parties to the merger shall file a
certificate of merger in the office of, and on a form prescribed by,
the Secretary of State.  The certificate of merger shall be executed
and acknowledged by each constituent domestic and foreign corporation
by its chairperson of the board, president or a vice president and
also by its secretary or an assistant secretary and by each domestic
constituent limited liability company by all managers of the limited
liability company (unless a lesser number is specified in its
articles of organization or operating agreement) and by each domestic
constituent limited partnership by all general partners (unless a
lesser number is provided in its certificate of limited partnership
or partnership agreement) and by each domestic constituent general
partnership by two partners (unless a lesser number is provided in
its partnership agreement) and by each foreign constituent limited
liability company by one or more managers and by each foreign
constituent general partnership or foreign constituent limited
partnership by one or more general partners, and by each constituent
reciprocal insurer by the chairperson of the board, president, or
vice president, and by the secretary or assistant secretary, or, if a
constituent reciprocal insurer has not appointed those officers, by
the chairperson of the board, president, or vice president, and by
the secretary or assistant secretary of the constituent reciprocal
insurer's attorney-in-fact.  The certificate of merger shall be
signed by each other party to the merger by those persons required or
authorized to execute the certificate of merger by the laws under
which that party is organized, specifying for that party the
provision of law or other basis for the authority of the signing
persons.  The certificate of merger shall set forth all of the
following:
   (A) The name, place of incorporation or organization, and the
Secretary of State's file number, if any, of each party to the
merger, separately identifying the disappearing parties and the
surviving party.
   (B) If the approval of the outstanding shares of a constituent
corporation was required by Chapter 12 (commencing with Section
1200), a statement setting forth the total number of outstanding
shares of each class entitled to vote on the merger and that the
principal terms of the agreement of merger were approved by a vote of
the number of shares of each class entitled to vote and the
percentage vote required of each class.
   (C) The future effective date or time, not more than 90 days
subsequent to the date of filing of the merger, if the merger is not
to be effective upon the filing of the certificate of merger with the
office of the Secretary of State.
                                                     (D) A statement,
by each party to the merger which is a domestic corporation not
organized under this division, a foreign corporation, or an other
business entity, of the statutory or other basis under which that
party is authorized by the laws under which it is organized to effect
the merger.
   (E) Any other information required to be stated in the certificate
of merger by the laws under which each party to the merger is
organized, including, if a domestic limited liability company is a
party to the merger, subdivision (a) of Section 17552, if a domestic
partnership is a party to the merger, subdivision (b) of Section
16915, and, if a domestic limited partnership is a party to the
merger, subdivision (a) of Section 15678.4.
   (F) Any other details or provisions that may be desired.
   Unless a future effective date or time is provided in a
certificate of merger, in which event the merger shall be effective
at that future effective date or time, a merger shall be effective
upon the filing of the certificate of merger in the office of the
Secretary of State and the several parties thereto shall be one
entity.  The certificate of merger shall not be filed, however, until
there has been filed by or on behalf of each party to the merger
that is taxed under the Bank and Corporation Tax Law, the existence
of which is terminated by the merger, the certificate of satisfaction
of the Franchise Tax Board that all taxes imposed by the Bank and
Corporation Tax Law have been paid or secured.  The surviving other
business entity shall keep a copy of the agreement of merger at its
principal place of business which, for purposes of this subdivision,
shall be the office referred to in Section 17057 if a domestic
limited liability company, at the business address specified in
paragraph (5) of subdivision (a) of Section 17552 if a foreign
limited liability company, at the office referred to in subdivision
(a) of Section 16403 if a domestic general partnership, at the
business address specified in subdivision (f) of Section 16911 if a
foreign partnership, at the office referred to in subdivision (a) of
Section 15614 if a domestic limited partnership, or at the business
address specified in paragraph (5) of subdivision (a) of Section
15678.4 if a foreign limited partnership.  Upon the request of a
holder of equity securities of a party to the merger, a person with
authority to do so on behalf of the surviving other business entity
shall promptly deliver to that holder, a copy of the agreement of
merger.  A waiver by that holder of the rights provided in the
foregoing sentence shall be unenforceable.  If a domestic reciprocal
insurer organized after 1974 to provide medical malpractice insurance
is a party to the merger the agreement of merger or certificate of
merger shall not be filed until there has been filed the certificate
issued by the Insurance Commissioner approving the merger in
accordance with Section 1555 of the Insurance Code.
   (h) (1) A copy of an agreement of merger certified on or after the
effective date by an official having custody thereof has the same
force in evidence as the original and, except as against the state,
is conclusive evidence of the performance of all conditions precedent
to the merger, the existence on the effective date of the surviving
party to the merger and the performance of the conditions necessary
to the adoption of any amendment to the articles, if applicable,
contained in the agreement of merger.
   (2) For all purposes for a merger in which the surviving entity is
a domestic other business entity and the filing of a certificate of
merger is required by paragraph (2) of subdivision (g), a copy of the
certificate of merger duly certified by the Secretary of State is
conclusive evidence of the merger of the constituent corporations,
either by themselves or together with the other parties to the
merger, into the surviving other business entity.
   (i) (1) Upon a merger pursuant to this section, the separate
existences of the disappearing parties to the merger cease and the
surviving party to the merger shall succeed, without other transfer,
to all the rights and property of each of the disappearing parties to
the merger and shall be subject to all the debts and liabilities of
each in the same manner as if the surviving party to the merger had
itself incurred them.
   (2) All rights of creditors and all liens upon the property of
each of the constituent corporations and other parties to the merger
shall be preserved unimpaired, provided that those liens upon
property of a disappearing party shall be limited to the property
affected thereby immediately prior to the time the merger is
effective.
   (3) Any action or proceeding pending by or against any
disappearing corporation or disappearing party to the merger may be
prosecuted to judgment, which shall bind the surviving party, or the
surviving party may be proceeded against or substituted in its place.

   (4) If a limited partnership or a general partnership is a party
to the merger, nothing in this section is intended to affect the
liability a general partner of a disappearing limited partnershipor
or general partnership may have in connection with the debts and
liabilities of the disappearing limited partnership or general
partnership existing prior to the time the merger is effective.
   (j) (1) The merger of domestic corporations with foreign
corporations or foreign other business entities in a merger in which
one or more other business entities is a party shall comply with
subdivision (a) and this subdivision.
   (2) If the surviving party is a domestic corporation or domestic
other business entity, the merger proceedings with respect to that
party and any domestic disappearing corporation shall conform to the
provisions of this section.  If the surviving party is a foreign
corporation or foreign other business entity, then, subject to the
requirements of subdivision (c), and of Section 407 and Chapter 12
(commencing with Section 1200) and Chapter 13 (commencing with
Section 1300), and, if applicable, corresponding provisions of the
Nonprofit Corporation Law or the Consumer Cooperative Corporation
Law, with respect to any domestic constituent corporations, Chapter
13 (commencing with Section 17600) of Title 2.5 with respect to any
domestic constituent limited liability companies, Article 6
(commencing with Section 16601) of Chapter 5 of Title 2 with respect
to any domestic constituent general partnerships, and Article 7.6
(commencing with Section 15679.1) of Chapter 3 of Title 2 with
respect to any domestic constituent limited partnerships, the merger
proceedings may be in accordance with the laws of the state or place
of incorporation or organization of the surviving party.
   (3) If the surviving party is a domestic corporation or domestic
other business entity, the certificate of merger or the agreement of
merger with attachments shall be filed as provided in subdivision (g)
and thereupon, subject to subdivision (c) of Section 110 or
paragraph (2) of subdivision (g), as is applicable, the merger shall
be effective as to each domestic constituent corporation and domestic
constituent other business entity.
   (4) If the surviving party is a foreign corporation or foreign
other business entity, the merger shall become effective in
accordance with the law of the jurisdiction in which the surviving
party is organized, but, except as provided in paragraph (5), the
merger shall be effective as to any domestic disappearing corporation
as of the time of effectiveness in the foreign jurisdiction upon the
filing in this state of a copy of the agreement of merger with an
officers' certificate of each constituent foreign and domestic
corporation and a certificate of merger of each constituent other
business entity attached, which officers' certificates and
certificates of merger shall conform to the requirements of paragraph
(1) of subdivision (g).  If one or more domestic other business
entities is a disappearing party in a merger pursuant to this
subdivision in which a foreign other business entity is the surviving
entity, a certificate of merger required by the laws under which
that domestic other business entity is organized, including
subdivision (a) of Section 15678.4, subdivision (b) of Section 16915,
or subdivision (a) of Section 17552, as is applicable, shall also be
filed at the same time as the filing of the agreement of merger.
   (5) If the date of the filing in this state pursuant to this
subdivision is more than six months after the time of the
effectiveness in the foreign jurisdiction, or if the powers of a
domestic disappearing corporation are suspended at the time of
effectiveness in the foreign jurisdiction, the merger shall be
effective as to the domestic disappearing corporation as of the date
of filing in this state.
   (6) In a merger described in paragraph (3) or (4), each foreign
disappearing corporation that is qualified for the transaction of
intrastate business shall automatically by the filing pursuant to
this subdivision surrender its right to transact intrastate business
as of the date of filing in this state or, if later, the effective
date of the merger.  With respect to each foreign disappearing other
business entity previously registered for the transaction of
intrastate business in this state, the filing of the agreement of
merger or certificate of merger, as is applicable, pursuant to this
subdivision automatically has the effect of a cancellation of
registration for that foreign other business entity as of the date of
filing in this state or, if later, the effective date of the merger,
without the necessity of the filing of a certificate of
cancellation.
   (7) A certificate of satisfaction of the Franchise Tax Board for
each disappearing party to the merger shall be filed when required by
subdivision (g) or when required by Section 23334 of the Revenue and
Taxation Code.
  SEC. 11.  Section 1200 of the Corporations Code is amended to read:

   1200.  A reorganization (Section 181) or a share exchange tender
offer (Section 183.5) shall be approved by the board of:
   (a) Each constituent corporation in a merger reorganization;
   (b) The acquiring corporation in an exchange reorganization;
   (c) The acquiring corporation and the corporation whose property
and assets are acquired in a sale-of-assets reorganization;
   (d) The acquiring corporation in a share exchange tender offer
(Section 183.5); and
   (e) The corporation in control of any constituent or acquiring
domestic or foreign corporation or other business entity under
subdivision (a), (b) or (c) and whose equity securities are issued,
transferred, or exchanged in the reorganization (a "parent party").

  SEC. 12.  Section 1201 of the Corporations Code is amended to read:

   1201.  (a) The principal terms of a reorganization shall be
approved by the outstanding shares (Section 152) of each class of
each corporation the approval of whose board is required under
Section 1200, except as provided in subdivision (b) and except that
(unless otherwise provided in the articles) no approval of any class
of outstanding preferred shares of the surviving or acquiring
corporation or parent party shall be required if the rights,
preferences, privileges and restrictions granted to or imposed upon
that class of shares remain unchanged (subject to the provisions of
subdivision (c)).  For the purpose of this subdivision, two classes
of common shares differing only as to voting rights shall be
considered as a single class of shares.
   (b) No approval of the outstanding shares (Section 152) is
required by subdivision (a) in the case of any corporation if that
corporation, or its shareholders immediately before the
reorganization, or both, shall own (immediately after the
reorganization) equity securities, other than any warrant or right to
subscribe to or purchase those equity securities, of the surviving
or acquiring corporation or a parent party (subdivision (d) of
Section 1200) possessing more than five-sixths of the voting power of
the surviving or acquiring corporation or parent party.  In making
the determination of ownership by the shareholders of a corporation,
immediately after the reorganization, of equity securities pursuant
to the preceding sentence, equity securities which they owned
immediately before the reorganization as shareholders of another
party to the transaction shall be disregarded.  For the purpose of
this section only, the voting power of a corporation shall be
calculated by assuming the conversion of all equity securities
convertible (immediately or at some future time) into shares entitled
to vote but not assuming the exercise of any warrant or right to
subscribe to or purchase those shares.
   (c) Notwithstanding subdivision (b), the principal terms of a
reorganization shall be approved by the outstanding shares (Section
152) of the surviving corporation in a merger reorganization if any
amendment is made to its articles which would otherwise require that
approval.
   (d) Notwithstanding subdivision (b), the principal terms of a
reorganization shall be approved by the outstanding shares (Section
152) of any class of a corporation which is a party to a merger or
sale-of-assets reorganization if holders of shares of that class
receive shares of the surviving or acquiring corporation or parent
party having different rights, preferences, privileges or
restrictions than those surrendered.  Shares in a foreign corporation
received in exchange for shares in a domestic corporation have
different rights, preferences, privileges and restrictions within the
meaning of the preceding sentence.
   (e) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by the affirmative vote of at
least two-thirds of each class of the outstanding shares of any close
corporation if the reorganization would result in their receiving
shares of a corporation which is not a close corporation.  However,
the articles may provide for a lesser vote, but not less than a
majority of the outstanding shares of each class.
   (f) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by the outstanding shares
(Section 152) of any class of a corporation which is a party to a
merger reorganization if holders of shares of that class receive
interests of a surviving other business entity in the merger.
   (g) Notwithstanding subdivisions (a) and (b), the principal terms
of a reorganization shall be approved by all shareholders of any
class or series if, as a result of the reorganization, the holders of
that class or series become personally liable for any obligations of
a party to the reorganization, unless all holders of that class or
series have the dissenters' rights provided in Chapter 13 (commencing
with Section 1300).
   (h) Any approval required by this section may be given before or
after the approval by the board.  Notwithstanding approval required
by this section, the board may abandon the proposed reorganization
without further action by the shareholders, subject to the
contractual rights, if any, of third parties.
  SEC. 12.5.  Section 5063.5 is added to the Corporations Code, to
read:
   5063.5.  "Other business entity" means a domestic or foreign
limited liability company, limited partnership, general partnership,
business trust, real estate investment trust, unincorporated
association (other than a nonprofit association), or a domestic
reciprocal insurer organized after 1974 to provide medical
malpractice insurance as set forth in Article 16 (commencing with
Section 1550) of Chapter 3 of Part 2 of Division 1 of the Insurance
Code.  As used herein, "general partnership" means a "partnership" as
defined in subdivision (7) of Section 16101; "business trust" means
a business organization formed as a trust; "real estate investment
trust" means a "real estate investment trust" as defined in
subsection (a) of Section 856 of the Internal Revenue Code of 1986,
as amended; and "unincorporated association" has the meaning set
forth in Section 24000.
  SEC. 12.7.  Section 5064.5 is added to the Corporations Code, to
read:
   5064.5.  "Parent party" means the corporation in control of any
constituent domestic or foreign corporation or other business entity
and whose equity securities are issued, transferred, or exchanged in
a merger pursuant to Section 6019.1 or 8019.1.
  SEC. 13.  Section 6010 of the Corporations Code is amended to read:

   6010.  (a) A public benefit corporation may merge with any
domestic corporation, foreign corporation (Section 171), or other
business entity (Section 5063.5).  However, without the prior written
consent of the Attorney General, a public benefit corporation may
only merge with another public benefit corporation or a religious
corporation or a foreign nonprofit corporation the articles of which
provide that its assets are irrevocably dedicated to charitable,
religious, or public purposes.
   (b) At least 20 days prior to consummation of any merger allowed
by subdivision (a), the Attorney General must be provided with a copy
of the proposed agreement of merger.
   (c) Without the prior written consent of the Attorney General,
when a merger occurs pursuant to subdivision (a), each member of a
constituent corporation may only receive or keep a membership in the
surviving corporation for or as a result of the member's membership
in the constituent corporation.
  SEC. 14.  Section 6019.1 is added to the Corporations Code, to
read:
   6019.1.  (a) Subject to the provisions of Sections 6010 and 9640,
any one or more corporations may merge with one or more other
business entities (Section 5063.5).  One or more other domestic
corporations and foreign corporations (Section 5053) may be parties
to the merger.  Notwithstanding the provisions of this section, such
a merger may be effected only if:
   (1) In a merger in which a domestic corporation or domestic other
business entity is a party, it is authorized by the laws under which
it is organized to effect the merger.
   (2) In a merger in which a foreign corporation is a party, it is
authorized by the laws under which it is organized to effect the
merger.
   (3) In a merger in which a foreign other business entity is a
party, it is authorized by the laws under which it is organized to
effect the merger.
   (b) Each corporation and each other party which desires to merge
shall approve an agreement of merger.  The board and the members
(Section 5034) of each corporation which desires to merge, and each
other person or persons, if any, whose approval of an amendment of
the articles of that corporation is required by the articles or
bylaws shall approve the agreement of merger.  The agreement of
merger shall be approved on behalf of each other party by those
persons authorized or required to approve the merger by the laws
under which it is organized.  The parties desiring to merge shall be
parties to the agreement of merger and other persons, including a
parent party (Section 5064.5), may be parties to the agreement of
merger.  The agreement of merger shall state all of the following:
   (1) The terms and conditions of the merger.
   (2) The name and place of incorporation or organization of each
party and the identity of the surviving party.
   (3) The amendments, if any, subject to Sections 5810 and 5816, to
the articles of the surviving corporation, if applicable, to be
effected by the merger.  The name of the surviving corporation may
be, subject to subdivision (b) of Section 5122 and subdivision (b) of
Section 9122, the same as, or similar to, the name of a disappearing
party to the merger.
   (4) The manner, if any, of converting the memberships of each of
the constituent corporations into shares, memberships, interests, or
other securities of the surviving party; and, if any memberships of
any of the constituent corporations are not to be converted solely
into shares, memberships, interests, or other securities of the
surviving party, the cash, rights, securities, or other property
which the holders of those memberships are to receive in exchange for
the memberships, which cash, rights, securities, or other property
may be in addition to, or in lieu of, shares, memberships, interests,
or other securities of the surviving corporation or surviving other
business entity.
   (5) Any other details or provisions required by the laws under
which any party to the merger is organized, including, if a domestic
limited partnership is a party to the merger, subdivision (a) of
Section 15678.2, or, if a domestic general partnership is a party to
the merger, subdivision (a) of Section 16911, or, if a domestic
limited liability company is a party to the merger, subdivision (a)
of Section 17551.
   (6) Any other details or provisions as are desired.
   (c) Notwithstanding its prior approval, an agreement of merger may
be amended prior to the filing of the agreement of merger if the
amendment is approved by each constituent corporation in the same
manner as the original agreement of merger.  If the agreement of
merger as so amended and approved is also approved by each of the
other parties to the agreement of merger, as so amended it shall then
constitute the agreement of merger.
   (d) The board of a constituent corporation may, in its discretion,
abandon a merger, subject to the contractual rights, if any, of
third parties, including other parties to the agreement of merger,
without further approval by the members (Section 5034) or other
persons, at any time before the merger is effective.
   (e) Each constituent corporation shall sign the agreement of
merger by its chairperson of the board, president or a vice
president, and also by its secretary or an assistant secretary acting
on behalf of their respective corporations.
   (f) After required approvals of the merger by each constituent
corporation and each other party to the merger, the surviving party
shall file a copy of the agreement of merger with an officers'
certificate of each constituent domestic and foreign corporation
attached stating the total number of outstanding shares or membership
interests of each class, if any, entitled to vote on the merger (and
identifying any other person or persons whose approval is required),
that the agreement of merger in the form attached or its principal
terms, as required, were approved by that corporation by a vote of a
number of shares or membership interests of each class entitled to
vote, if any, which equaled or exceeded the vote required, specifying
each class entitled to vote and the percentage vote required of each
class, and, if applicable, by that other person or persons whose
approval is required.
   If equity securities of a parent party (Section 5064.5) are to be
issued in the merger, the officers' certificate or certificate of
merger of the controlled party shall state either that no vote of the
shareholders of the parent party was required or that the required
vote was obtained.  The merger and any amendment of the articles of
the surviving corporation, if applicable, contained in the agreement
of merger shall be effective upon the filing of the agreement of
merger, subject to the provisions of subdivision (h).  The agreement
of merger shall not be filed, however, until there has been filed by
or on behalf of each party to the merger taxed under the Bank and
Corporation Tax Law, the existence of which is terminated by the
merger, the certificate of satisfaction of the Franchise Tax Board
that all taxes imposed by that law have been paid or secured.  If a
domestic reciprocal insurer organized after 1974 to provide medical
malpractice insurance is a party to the merger, the agreement of
merger or certificate of merger shall not be filed until there has
been filed the certificate issued by the Insurance Commissioner
approving the merger pursuant to Section 1555 of the Insurance Code.

   In lieu of an officers' certificate, a certificate of merger, on a
form prescribed by the Secretary of State, shall be filed for each
constituent other business entity.  The certificate of merger shall
be executed and acknowledged by each domestic constituent limited
liability company by all of the managers of the limited liability
company (unless a lesser number is specified in its articles of
organization or operating agreement) and by each domestic constituent
limited partnership by all general partners (unless a lesser number
is provided in its certificate of limited partnership or partnership
agreement) and by each domestic constituent general partnership by
two partners (unless a lesser number is provided in its partnership
agreement) and by each foreign constituent limited liability company
by one or more managers and by each foreign constituent general
partnership or foreign constituent limited partnership by one or more
general partners, and by each constituent reciprocal insurer by the
chairperson of the board, president, or vice president, and also by
the secretary or assistant secretary, or, if a constituent reciprocal
insurer has not appointed such officers, by the chairperson of the
board, president, or vice president, and also by the secretary or
assistant secretary of the constituent reciprocal insurer's
attorney-in-fact, and by each other party to the merger by those
persons required or authorized to execute the certificate of merger
by the laws under which that party is organized, specifying for such
party the provision of law or other basis for the authority of the
signing persons.
   The certificate of merger shall set forth, if a vote of the
shareholders, members, partners, or other holders of interests of a
constituent other business entity was required, a statement setting
forth the total number of outstanding interests of each class
entitled to vote on the merger and that the agreement of merger or
its principal terms, as required, were approved by a vote of the
number of interests of each class which equaled or exceeded the vote
required, specifying each class entitled to vote and the percentage
vote required of each class, and any other information required to be
set forth under the laws under which the constituent other business
entity is organized, including, if a domestic limited partnership is
a party to the merger, subdivision (a) of Section 15678.4, if a
domestic general partnership is a party to the merger, subdivision
(b) of Section 16915, and, if a domestic limited liability company is
a party to the merger, subdivision (a) of Section 17552.  The
certificate of merger for each constituent foreign other business
entity, if any, shall also set forth the statutory or other basis
under which that foreign other business entity is authorized by the
                                            laws under which it is
organized to effect the merger.
   The Secretary of State may certify a copy of the agreement of
merger separate from the officers' certificates and certificates of
merger attached thereto.
   (g) A copy of an agreement of merger certified on or after the
effective date by an official having custody thereof has the same
force in evidence as the original and, except as against the state,
is conclusive evidence of the performance of all conditions precedent
to the merger, the existence on the effective date of the surviving
party to the merger, the performance of the conditions necessary to
the adoption of any amendment to the articles, if applicable,
contained in the agreement of merger, and the merger of the
constituent corporations, either by themselves or together with other
constituent parties, into the surviving party to the merger.
   (h) (1) The merger of domestic corporations with foreign
corporations or foreign other business entities in a merger in which
one or more other business entities is a party shall comply with
subdivisions (a) and (f) and this subdivision.
   (2) Subject to subdivision (c) of Section 5008 and paragraph (3),
the merger shall be effective as to each domestic constituent
corporation and domestic constituent other business entity upon
filing of the agreement of merger with attachments as provided in
subdivision (f).
   (3) If the surviving party is a foreign corporation or foreign
other business entity, except as provided in paragraph (4), the
merger shall be effective as to any domestic disappearing corporation
as of the time of effectiveness in the foreign jurisdiction upon the
filing in this state of a copy of the agreement of merger with an
officers' certificate of the surviving foreign corporation and of
each constituent foreign and domestic corporation and a certificate
of merger of each constituent other business entity attached, which
officers' certificates and certificates of merger shall conform to
the requirements of subdivision (f).
   If one or more domestic other business entities is a disappearing
party in a merger pursuant to this subdivision in which a foreign
other business entity is the surviving entity, a certificate of
merger required by the laws under which each domestic other business
entity is organized, including subdivision (a) of Section 15678.4,
subdivision (b) of Section 16915, or subdivision (a) of Section
17552, if applicable, shall also be filed at the same time as the
filing of the agreement of merger.
   (4) If the date of the filing in this state pursuant to this
subdivision is more than six months after the time of the
effectiveness in the foreign jurisdiction, or if the powers of a
domestic disappearing corporation are suspended at the time of
effectiveness in the foreign jurisdiction, the merger shall be
effective as to the domestic disappearing corporation as of the date
of filing in this state.
   (5) Each foreign disappearing corporation that is qualified for
the transaction of intrastate business shall automatically by the
filing pursuant to subdivision (f) surrender its right to transact
intrastate business as of the date of filing in this state or, if
later, the effective date of the merger.  With respect to each
foreign disappearing other business entity previously registered for
the transaction of intrastate business in this state, the filing of
the agreement of merger pursuant to subdivision (f) automatically has
the effect of a cancellation of registration for that foreign other
business entity as of the date of filing in this state or, if later,
the effective date of the merger, without the necessity of the filing
of a certificate of cancellation.
  SEC. 15.  Section 6020 of the Corporations Code is amended to read:

   6020.  (a) Upon merger pursuant to this chapter the separate
existences of the disappearing parties to the merger cease and the
surviving party to the merger shall succeed, without other transfer,
to all the rights and property of each of the disappearing parties to
the merger and shall be subject to all the debts and liabilities of
each and trust obligations upon the property of a disappearing party
in the same manner as if incurred by the surviving party to the
merger.
   (b) All rights of creditors and all liens and trusts upon or
arising from the property of each of the constituent corporations and
other parties to the merger shall be preserved unimpaired, provided
that the liens and trust obligations upon property of a disappearing
party shall be limited to the property affected thereby immediately
prior to the time the merger is effective.
   (c) Any action or proceeding pending by or against any
disappearing corporation or other party to the merger may be
prosecuted to judgment, which shall bind the surviving party to the
merger, or the surviving  party to the merger may be proceeded
against or substituted in its place.
  SEC. 16.  Section 6021 of the Corporations Code is amended to read:

   6021.  Whenever a domestic or foreign corporation or other
business entity (Section 5063.5) having any real property in this
state merges  with another domestic or foreign corporation or other
business entity pursuant to the laws of this state or of the state or
place in which any constituent party to the merger was organized,
and the laws of the state or place of organization (including this
state) of any disappearing party to the merger provide substantially
that the making and filing of the agreement of merger vests in the
surviving party to the merger all the real property of any
disappearing party to the merger, the filing for record in the office
of the county recorder of any county in this state in which any of
the real property of the disappearing party to the merger is located
of either (a) a certificate prescribed by the Secretary of State, or
(b) a copy of the agreement of merger or certificate of merger,
certified by the Secretary of State or an authorized public official
of the state or place pursuant to the laws of which the merger is
effected, shall evidence record ownership in the surviving party to
the merger of all interest of that disappearing party to the merger
in and to the real property located in that county.
  SEC. 17.  Section 6022 of the Corporations Code is amended to read:

   6022.  Any bequest, devise, gift, grant, or promise contained in a
will or other instrument of donation, subscription, or conveyance,
which is made to a constituent corporation and which takes effect or
remains payable after the merger, inures to the surviving party to
the merger.
  SEC. 18.  Section 8010 of the Corporations Code is amended to read:

   8010.  A mutual benefit corporation may merge with any domestic
corporation, foreign corporation, foreign business corporation,  or
other business entity (Section 5063.5).  However, a merger with a
public benefit corporation or a religious corporation must have the
prior written consent of the Attorney General.
  SEC. 19.  Section 8019.1 is added to the Corporations Code, to
read:
   8019.1.  (a) Subject to the provisions of Section 8010, any one or
more corporations may merge with one or more other business entities
(Section 5063.5).  One or more other domestic corporations, foreign
corporations (Sections 5053), and foreign business corporations
(Section 5052) may be parties to the merger.  Notwithstanding the
provisions of this section, such a merger may be effected only if:
   (1) In a merger in which a domestic corporation or domestic other
business entity is a party, it is authorized by the laws under which
it is organized to effect the merger.
   (2) In a merger in which a foreign corporation or foreign business
corporation is a party, it is authorized by the laws under which it
is organized to effect the merger.
   (3) In a merger in which a foreign other business entity is a
party, it is authorized by the laws under which it is organized to
effect the merger.
   (b) Each corporation and each other party which desires to merge
shall approve an agreement of merger.  The board and the members
(Section 5034) of each corporation which desires to merge, and each
other person or persons, if any, whose approval of an amendment of
the articles of that corporation is required by the articles or
bylaws shall approve the agreement of merger.  The agreement of
merger shall be approved on behalf of each other constituent party by
those persons authorized or required to approve the merger by the
laws under which it is organized.  The parties desiring to merge
shall be parties to the agreement of merger and other persons,
including a parent party (Section 5064.5), may be parties to the
agreement of merger.  The agreement of merger shall state all of the
following:
   (1) The terms and conditions of the merger.
   (2) The name and place of incorporation or organization of each
party and the identity of the surviving party.
   (3) The amendments, if any, subject to Sections 7810 and 7816, to
the articles of the surviving corporation, if applicable, to be
effected by the merger.  The name of the surviving corporation may
be, subject to subdivisions (b) and (c) of Section 7122, the same as
or similar to the name of a disappearing party to the merger.
   (4) The manner, if any, of converting the memberships or
securities of each of the constituent corporations into shares,
memberships, interests, or other securities of the surviving party;
and, if any memberships or securities of any of the constituent
corporations are not to be converted solely into shares, memberships,
interests, or other securities of the surviving party, cash, rights,
securities, or other property which the holders of those memberships
or securities are to receive in exchange for the memberships or
securities, which cash, rights, securities, or other property may be
in addition to or in lieu of shares, memberships, interests, or other
securities of the surviving party.
   (5) Any other details or provisions required by the laws under
which any party to the merger is organized, including, if a domestic
limited partnership is a party to the merger, subdivision (a) of
Section 15678.2, or, if a domestic general partnership is a party to
the merger, subdivision (a) of Section 16911, or, if a domestic
limited liability company is a party to the merger, subdivision (a)
of Section 17551.
   (6) Any other details or provisions as are desired.
   (c) Each membership of the same class of any constituent
corporation (other than the cancellation of memberships held by a
party to the merger or its parent or a wholly owned subsidiary of
either in another constituent corporation) shall be treated equally
with respect to any distribution of cash, property, rights, or
securities unless (i) all members of the class consent or (ii) the
commissioner has approved the terms and conditions of the transaction
and the fairness of those terms pursuant to Section 25142.
   (d) Notwithstanding its prior approval, an agreement of merger may
be amended prior to the filing of the agreement of merger if the
amendment is approved by each constituent corporation in the same
manner as the original agreement of merger.  If the agreement of
merger as so amended and approved is also approved by each of the
other parties to the agreement of merger, as so amended it shall then
constitute the agreement of merger.
   (e) The board of a constituent corporation may, in its discretion,
abandon a merger, subject to the contractual rights, if any, of
third parties, including other parties to the agreement of merger,
without further approval by the members (Section 5034) or other
persons, at any time before the merger is effective.
   (f) Each constituent corporation shall sign the agreement of
merger by its chairperson of the board, president, or a vice
president and also by its secretary or an assistant secretary acting
on behalf of their respective corporations.
   (g) After required approvals of the merger by each constituent
corporation and each other party to the merger, the surviving party
shall file a copy of the agreement of merger with an officers'
certificate of each constituent domestic corporation, foreign
corporation, and foreign business corporation attached stating the
total number of outstanding shares or membership interests of each
class entitled to vote on the merger (and identifying any other
person or persons whose approval is required), that the agreement of
merger in the form attached or its principal terms, as required, were
approved by that corporation by a vote of a number of shares or
membership interests of each class which equaled or exceeded the vote
required, specifying each class entitled to vote required of each
class, and, if applicable, by such other person or persons whose
approval is required.
   If equity securities of a parent party (Section 5064.5) are to be
issued in the merger, the officers' certificate or certificate of
merger of the controlled party shall state either that no vote of the
shareholders of the parent party was required or that the required
vote was obtained.  The merger and any amendment of the articles of
the surviving corporation, if applicable, contained in the agreement
of merger shall be effective upon the filing of the agreement of
merger, subject to the provisions of subdivision (i).  The agreement
of merger shall not be filed, however, until there has been filed by
or on behalf of each party to the merger taxed under the Bank and
Corporation Tax Law, the existence of which is terminated by the
merger, the certificate of satisfaction of the Franchise Tax Board
that all taxes imposed by that law have been paid or secured.  If a
domestic reciprocal insurer organized after 1974 to provide medical
malpractice insurance is a party to the merger, the agreement of
merger or certificate of merger shall not be filed until there has
been filed the certificate issued by the Insurance Commissioner
approving the merger pursuant to Section 1555 of the Insurance Code.

   In lieu of an officers' certificate, a certificate of merger, on a
form prescribed by the Secretary of State, shall be filed for each
constituent other business entity.  The certificate of merger shall
be executed and acknowledged by each domestic constituent limited
liability company by all of the managers of the limited liability
company (unless a lesser number is specified in its articles of
organization or operating agreement) and by each domestic constituent
limited partnership by all general partners (unless a lesser number
is provided in its certificate of limited partnership or partnership
agreement) and by each domestic constituent general partnership by
two partners (unless a lesser number is provided in its partnership
agreement) and by each foreign constituent limited liability company
by one or more managers and by each foreign constituent general
partnership or foreign constituent limited partnership by one or more
general partners, and by each constituent reciprocal insurer by the
chairperson of the board, president, or vice president, and by the
secretary or assistant secretary, or, if a constituent reciprocal
insurer has not appointed such officers, by the chairperson of the
board, president, or vice president, and by the secretary or
assistant secretary of the constituent reciprocal insurer's
attorney-in-fact, and by each other party to the merger by those
persons required or authorized to execute the certificate of merger
by the laws under which that party is organized, specifying for such
party the provision of law or other basis for the authority of the
signing persons.
   The certificate of merger shall set forth, if a vote of the
shareholders, members, partners, or other holders of interests of a
constituent other business entity was required, a statement setting
forth the total number of outstanding interests of each class
entitled to vote on the merger and that the principal terms of the
agreement of merger were approved by a vote of the number of
interests of each class which equaled or exceeded the vote required,
specifying each class entitled to vote and the percentage vote
required of each class, and any other information required to be set
forth under the laws under which the constituent other business
entity is organized, including, if a domestic limited partnership is
a party to the merger, subdivision (a) of Section 15678.4, if a
domestic general partnership is a party to the merger, subdivision
(b) of Section 16915 and, if a domestic limited liability company is
a party to the merger, subdivision (a) of Section 17552.  The
certificate of merger for each constituent foreign other business
entity, if any, shall also set forth the statutory or other basis
under which that foreign other business entity is authorized by the
laws under which it is organized to effect the merger.
   The Secretary of State may certify a copy of the agreement of
merger separate from the officers' certificates and certificates of
merger attached thereto.
   (h) A copy of an agreement of merger certified on or after the
effective date by an official having custody thereof has the same
force in evidence as the original and, except as against the state,
is conclusive evidence of the performance of all conditions precedent
to the merger, the existence on the effective date of the surviving
party to the merger, the performance of the conditions necessary to
the adoption of any amendment to the articles, if applicable,
contained in the agreement of merger, and of the merger of the
constituent corporations, either by themselves or together with other
constituent parties, into the surviving party to the merger.
   (i) (1) The merger of domestic corporations with foreign
corporations or foreign other business entities in a merger in which
one or more other business entities is a party shall comply with
subdivisions (a) and (g) and this subdivision.
   (2) Subject to subdivision (c) of Section 5008 and paragraph (3),
the merger shall be effective as to each domestic constituent
corporation and domestic constituent other business entity upon
filing of the agreement of merger with attachments as provided in
subdivision (g).
   (3) If the surviving party is a foreign corporation or foreign
business corporation or foreign other business entity, except as
provided in paragraph (4), the merger shall be effective as to any
domestic disappearing corporation as of the time of effectiveness in
the foreign jurisdiction upon the filing in this state of a copy of
the agreement of merger with an officers' certificate of the
surviving foreign corporation or foreign business corporation and of
each constituent foreign and domestic corporation and a certificate
of merger of each constituent other business entity attached, which
officers' certificates and certificates of merger shall conform to
the requirements of subdivision (g).
   If one or more domestic other business entities is a disappearing
party in a merger pursuant to this subdivision in which a foreign
other business entity is the surviving entity, a certificate of
merger required by the laws under which each domestic other business
entity is organized, including subdivision (a) of Section 15678.4,
subdivision (b) of Section 16915, or subdivision (a) of Section
17522, if applicable, shall also be filed at the same time as the
filing of the agreement of merger.
   (4) If the date of the filing in this state pursuant to this
subdivision is more than six months after the time of the
effectiveness in the foreign jurisdiction, or if the powers of a
domestic disappearing corporation are suspended at the time of
effectiveness in the foreign jurisdiction, the merger shall be
effective as to the domestic disappearing corporation as of the date
of filing in this state.
   (5) Each foreign disappearing corporation that is qualified for
the transaction of intrastate business shall automatically by the
filing pursuant to subdivision (g) surrender its right to transact
intrastate business as of the date of filing in this state or, if
later, the effective date of the merger.  With respect to each
foreign disappearing other business entity previously registered for
the transaction of intrastate business in this state, the filing of
the agreement of merger pursuant to subdivision (g) automatically has
the effect of a cancellation of registration for that foreign other
business entity as of the date of filing in this state or, if later,
the effective date of the merger, without the necessity of the filing
of a certificate of cancellation.
  SEC. 20.  Section 8020 of the Corporations Code is amended to read:

   8020.  (a) Upon merger pursuant to this chapter the separate
existences of the disappearing parties to the merger cease and the
surviving party to the merger shall succeed, without other transfer,
to all the rights and property of each of the disappearing parties to
the merger and shall be subject to all the debts and liabilities of
each and trust obligations upon the property of a disappearing party
in the same manner as if incurred by the surviving party to the
merger.
   (b) All rights of creditors and all liens and trusts upon or
arising from the property of each of the constituent corporations and
other parties to the merger shall be preserved unimpaired, provided
that the liens and trust obligations upon property of a disappearing
party shall be limited to the property affected thereby immediately
prior to the time the merger is effective.
   (c) Any action or proceeding pending by or against any
disappearing corporation or other party to the merger may be
prosecuted to judgment, which shall bind the surviving party to the
merger, or the surviving party to the merger may be proceeded against
or substituted in its place.
  SEC. 21.  Section 8021 of the Corporations Code is amended to read:

   8021.  Whenever a domestic or foreign or foreign business
corporation or other business entity (Section 5063.5) having any real
property in this state merges with another domestic or foreign or
foreign business corporation or other business entity pursuant to the
laws of this state or of the state or place in which any constituent
party to the merger was organized, and the laws of the state or
place of organization (including this state) of any disappearing
party to the merger provide substantially that the making and filing
of the agreement of merger vests in the surviving party to the merger
all the real property of any disappearing party to the merger, the
filing for record in the office of the county recorder of any county
in this state in which any of the real property of the disappearing
party to the merger is located of either (a) a certificate prescribed
by the Secretary of State, or (b) a copy of the agreement of merger
or certificate of merger, certified by the Secretary of State or an
authorized public official of the state or place pursuant to the laws
of which the merger is effected, shall evidence record ownership in
the surviving party to the merger of all interest of such
disappearing party to the merger in and to the real property located
in that county.
  SEC. 22.  Section 8022 of the Corporations Code is amended to read:

   8022.  Any bequest, devise, gift, grant, or promise contained in a
will or other instrument of donation, subscription, or conveyance,
which is made to a constituent corporation and which takes effect or
remains payable after the merger, inures to the surviving party to
the merger.
  SEC. 23.  Section 9640 of the Corporations Code is amended to read:

   9640.  (a) The provisions of Chapter 10 (commencing with Section
6010) of Part 2 apply to religious corporations except subdivision
(a) of Section 6010 and Sections 6011 and 6012.
   (b) A corporation may merge with any domestic corporation, foreign
corporation, or  other business entity (Section 5063.5).  However,
without the prior written consent of the Attorney General, a
religious corporation may only merge with another religious
corporation or with a public benefit corporation or a foreign
nonprofit corporation the articles of which provide that its assets
are irrevocably dedicated to charitable, religious or public
purposes.
   (c) The principal terms of the merger shall be approved by the
members (Section 5034) of each class of each constituent corporation
and by each other person or persons whose approval of an amendment of
the articles is required by the articles or bylaws; and the approval
by the members (Section 5034) or any other person or persons
required by this section may be given before or after the approval by
the board.
   (d) The board of each corporation that desires to merge shall
approve an agreement of merger.  The constituent corporations shall
be parties to the agreement of merger and other persons may be
parties to the agreement of merger.  The agreement shall state all of
the following:
   (1) The terms and conditions of the merger.
   (2) The amendments, subject to Sections 5810 and 5816, to the
articles of the surviving corporation to be effected by the merger,
if any.  If any amendment changes the name of the surviving
corporation, the new name may be the same as or similar to the name
of a disappearing corporation, subject to subdivision (b) of Section
9122.
   (3) The amendments to the bylaws of the surviving corporation to
be effected by the merger, if any.
   (4) The name and place of incorporation of each constituent
corporation and which of the constituent corporations is the
surviving corporation.
   (5) The manner, if any, of converting memberships of the
constituent corporations into memberships of the surviving
corporation.
   (6) Any other details or provisions as are desired, if any.
  SEC. 23.5.  Section 12242.5 is added to the Corporations Code, to
read:
   12242.5.  "Other business entity" means a domestic or foreign
limited liability company, limited partnership, general partnership,
business trust, real estate investment trust, unincorporated
association (other than a nonprofit association), or a domestic
reciprocal insurer organized after 1974 to provide medical
malpractice insurance as set forth in Article 16 (commencing with
Section 1550) of Chapter 3 of Part 2 of Division 1 of the Insurance
Code.  As used herein, "general partnership" means a "partnership" as
defined in subdivision (7) of Section 16101; "business trust" means
a business organization formed as a trust; "real estate investment
trust" means a "real estate investment trust" as defined in
subsection (a) of Section 856 of the Internal Revenue Code of 1986,
as amended; and "unincorporated association" has the meaning set
forth in Section 24000.
                                        SEC. 23.7.  Section 12242.6
is added to the Corporations Code, to read:
   12242.6.  "Parent party" means the corporation in control of any
constituent domestic or foreign corporation or other business entity
and whose equity securities are issued, transferred, or exchanged in
a merger pursuant to Section 12540.1.
  SEC. 24.  Section 12530 of the Corporations Code is amended to
read:
   12530.  Any corporation may merge with another domestic
corporation, foreign corporation,  or other business entity (Section
12242.5).  However, a merger with a public benefit corporation or a
religious corporation must have the prior written consent of the
Attorney General.
  SEC. 25.  Section 12540.1 is added to the Corporations Code, to
read:
   12540.1.  (a) Any one or more corporations may merge with one or
more other business entities (Section 12242.5).  Subject to the
provisions of Section 12530, one or more other domestic corporations
or foreign corporations (Section 12237) may be parties to the merger.

   Notwithstanding the provisions of this section, such a merger may
be effected only if:
   (1) In a merger in which a domestic corporation or domestic other
business entity is a party, it is authorized by the laws under which
it is organized to effect the merger.
   (2) In a merger in which a foreign corporation is a party, it is
authorized by the laws under which it is organized to effect the
merger.
   (3) In a merger in which a foreign other business entity is a
party, it is authorized by the laws under which it is organized to
effect the merger.
   (b) Each corporation, other domestic corporation, foreign
corporation, and other business entity which desires to merge shall
approve an agreement of merger.  The board and the members of each
corporation which desires to merge shall approve (Sections 12222 and
12224) the agreement of merger.  The agreement of merger shall be
approved on behalf of each other constituent party by those persons
authorized or required to approve the merger by the laws under which
it is organized.
   The parties desiring to merge shall be parties to the agreement of
merger and other persons, including a parent party (Section
12242.6), may be parties to the agreement of merger.  The agreement
of merger shall state all of the following:
   (1) The terms and conditions of the merger.
   (2) The name and place of incorporation or organization of each
party and the identity of the surviving party.
   (3) The amendments, if any, subject to Sections 12500 and 12507,
to the articles of the surviving corporation, if applicable, to be
effected by the merger.  The name of the surviving corporation may
be, subject to subdivisions (b) and (c) of Section 12302, the same
as, or similar to, the name of a disappearing party to the merger.
   (4) The manner, if any, of converting the memberships or
securities of each of the constituent corporations into shares,
memberships, interests, or other securities of the surviving party
and, if any memberships or securities of any of the constituent
corporations are not to be converted solely into shares, memberships,
interests, or other securities of the surviving party, the cash,
rights, securities, or other property which the holders of those
memberships or securities are to receive in exchange for the
memberships or securities, which cash, rights, securities, or other
property may be in addition to or in lieu of shares, memberships,
interests, or other securities of the surviving party.
   (5) Any other details or provisions required by the laws under
which any party to the merger is organized, including, if a domestic
limited partnership is a party to the merger, subdivision (a) of
Section 15678.2, or, if a domestic general partnership is a party to
the merger, subdivision (a) of Section 16911, or, if a domestic
limited liability company is a party to the merger, subdivision (a)
of Section 17551.
   (6) Any other details or provisions as are desired.
   (c) Each membership of the same class of any constituent
corporation (other than the cancellation of memberships held by a
party to the merger or its parent or a wholly owned subsidiary of
either in another constituent corporation) shall be treated equally
with respect to any distribution of cash, property, rights, or
securities unless (i) all members of the class consent or (ii) the
commissioner has approved the terms and conditions of the transaction
and the fairness of those terms pursuant to Section 25142.
   (d) Notwithstanding its prior approval, an agreement of merger may
be amended prior to the filing of the agreement of merger if the
amendment is approved by each constituent corporation in the same
manner as the original agreement of merger.  If the agreement of
merger as so amended and approved is also approved by each of the
other parties to the agreement of merger, as so amended it shall then
constitute the agreement of merger.
   (e) The board of a constituent corporation may, in its discretion,
abandon a merger, subject to the contractual rights, if any, of
third parties, including other parties to the agreement of merger,
without further approval by the members (Section 12224), at any time
before the merger is effective.
   (f) Each constituent corporation shall sign the agreement of
merger by its chairperson of the board, president, or a vice
president and also by its secretary or an assistant secretary acting
on behalf of their respective corporations.
   (g) After required approvals of the merger by each constituent
corporation and each other party to the merger, the surviving party
shall file a copy of the agreement of merger with an officers'
certificate of each constituent domestic and foreign corporation
attached stating the total number of outstanding shares or membership
interests of each class entitled to vote on the merger (and
identifying any other person or persons whose approval is required),
that the agreement of merger in the form attached or its principal
terms, as required, were approved by that corporation by a vote of a
number of shares or membership interests of each class which equaled
or exceeded the vote required, specifying each class entitled to vote
and the percentage vote required of each class, and, if applicable,
by that other person or persons whose approval is required.
   If equity securities of a parent party (Section 12242.6) are to be
issued in the merger, the officers' certificate or certificate of
merger of the controlled party shall state either that no vote of the
shareholders of the parent party was required or that the required
vote was obtained.  The merger and any amendment of the articles of
the surviving corporation, if applicable, contained in the agreement
of merger shall be effective upon the filing of the agreement of
merger, subject to the provisions of subdivision (i).  The agreement
of merger shall not be filed, however, until there has been filed by
or on behalf of each party to the merger taxed under the Bank and
Corporation Tax Law, the existence of which is terminated by the
merger, the certificate of satisfaction of the Franchise Tax Board
that all taxes imposed by that law have been paid or secured.  If a
domestic reciprocal insurer organized after 1974 to provide medical
malpractice insurance is a party to the merger, the agreement of
merger or certificate of merger shall not be filed until there has
been filed the certificate issued by the Insurance Commissioner
approving the merger pursuant to Section 1555 of the Insurance Code.

   In lieu of an officers' certificate, a certificate of merger, on a
form prescribed by the Secretary of State, shall be filed for each
constituent other business entity.  The certificate of merger shall
be executed and acknowledged by each domestic constituent limited
liability company by all of the managers of the limited liability
company (unless a lesser number is specified in its articles of
organization or operating agreement) and by each domestic constituent
limited partnership by all general partners (unless a lesser number
is provided in its certificate of limited partnership or partnership
agreement) and by each domestic constituent general partnership by
two partners (unless a lesser number is provided in its partnership
agreement) and by each foreign constituent general partnership or
foreign constituent limited liability company by one or more managers
and by each foreign constituent limited partnership by one or more
general partners, and by each constituent reciprocal insurer by the
chairperson of the board, president, or vice president, and by the
secretary or assistant secretary, or, if a constituent reciprocal
insurer has not appointed such officers, by the chairperson of the
board, president, or vice president, and by the secretary or
assistant secretary of the constituent reciprocal insurer's
attorney-in-fact, and by each other party to the merger by those
persons required or authorized to execute the certificate of merger
by the laws under which that party is organized, specifying for such
party the provision of law or other basis for the authority of the
signing persons.
   The certificate of merger shall set forth, if a vote of the
shareholders, members, partners, or other holders of interests of the
constituent other business entity was required, a statement setting
forth the total number of outstanding interests of each class
entitled to vote on the merger and that the agreement of merger or
its principal terms, as required, were approved by a vote of the
number of interests of each class which equaled or exceeded the vote
required, specifying each class entitled to vote and the percentage
vote required of each class, and any other information required to be
set forth under the laws under which the constituent other business
entity is organized, including, if a domestic limited partnership is
a party to the merger, subdivision (a) of Section 15678.4, if a
domestic general partnership is a party to the merger, subdivision
(b) of Section 16915, and, if a domestic limited liability company is
a party to the merger, subdivision (a) of Section 17552.  The
certificate of merger for each constituent foreign other business
entity, if any, shall also set forth the statutory or other basis
under which that foreign other business entity is authorized by the
laws under which it is organized to effect the merger.
   The Secretary of State may certify a copy of the agreement of
merger separate from the officers' certificates and certificates of
merger attached thereto.
   (h) a copy of an agreement of merger certified on or after the
effective date by an official having custody thereof has the same
force in evidence as the original and, except as against the state,
is conclusive evidence of the performance of all conditions precedent
to the merger, the existence on the effective date of the surviving
party to the merger, the performance of the conditions necessary to
the adoption of any amendment to the articles, if applicable,
contained in the agreement of merger, and of the merger of the
constituent corporations, either by themselves or together with other
constituent parties, into the surviving party to the merger.
   (i) (1) The merger of domestic corporations with foreign
corporations or foreign other business entities in a merger in which
one or more other business entities is a party shall comply with
subdivisions (a) and (g) and this subdivision.
   (2) Subject to subdivision (c) of Section 12214 and paragraph (3),
the merger shall be effective as to each domestic constituent
corporation and domestic constituent other business entity upon
filing of the agreement of merger with attachments as provided in
subdivision (g).
   (3) If the surviving party is a foreign corporation or foreign
other business entity, except as provided in paragraph (4), the
merger shall be effective as to any domestic disappearing corporation
as of the time of effectiveness in the foreign jurisdiction upon the
filing in this state of a copy of the agreement of merger with an
officers' certificate of the surviving foreign corporation and of
each constituent foreign and domestic corporation and a certificate
of merger of each constituent other business entity attached, which
officers' certificates and certificates of merger shall conform to
the requirements of subdivision (g).
   If one or more domestic other business entities is a disappearing
party in a merger pursuant to this subdivision in which a foreign
other business entity is the surviving entity, a certificate of
merger required by the laws under which each domestic other business
entity is organized, including subdivision (a) of Section 15678.4,
subdivision (b) of Section 16915 or subdivision (a) of Section 17552,
if applicable, shall also be filed at the same time as the filing of
the agreement of merger.
   (4) If the date of the filing in this state pursuant to this
subdivision is more than six months after the time of the
effectiveness in the foreign jurisdiction, or if the powers of a
domestic disappearing corporation are suspended at the time of
effectiveness in the foreign jurisdiction, the merger shall be
effective as to the domestic disappearing corporation as of the date
of filing in this state.
   (5) Each foreign disappearing corporation that is qualified for
the transaction of intrastate business shall automatically by the
filing pursuant to subdivision (g) surrender its right to transact
intrastate business as of the date of filing in this state or, if
later, the effective date of the merger.  With respect to each
foreign disappearing other business entity previously registered for
the transaction of intrastate business in this state, the filing of
the agreement of merger pursuant to subdivision (g) automatically has
the effect of a cancellation of registration for that foreign other
business entity without the necessity of the filing of a certificate
of cancellation.
  SEC. 25.2.  Section 12550 of the Corporations Code is amended to
read:
   12550.  (a) Upon merger pursuant to this chapter the separate
existences of the disappearing parties to the merger cease and the
surviving party to the merger shall succeed, without other transfer,
to all the rights and property of each of the disappearing parties to
the merger and shall be subject to all the debts and liabilities of
each and trust obligations upon the property of a disappearing party
in the same manner as if incurred by the surviving  party to the
merger.
   (b) All rights of creditors and all liens and trusts upon or
arising from the property of each of the constituent corporations and
other parties to the merger shall be preserved unimpaired, provided
that these liens and trust obligations upon property of a
disappearing party shall be limited to the property affected thereby
immediately prior to the time the merger is effective.
   (c) Any action or proceeding pending by or against any
disappearing corporation or other party to the merger may be
prosecuted to judgment, which shall bind the surviving party to the
merger, or the surviving party to the merger may be proceeded against
or substituted in its place.
  SEC. 25.4.  Section 12551 of the Corporations Code is amended to
read:
   12551.  Whenever a domestic or foreign corporation or other
business entity (Section 12242.5) having any real property in this
state merges with another domestic or foreign corporation or other
business entity pursuant to the laws of this state or of the state or
place in which any constituent party to the merger was organized,
and the laws of the state or place of organization (including this
state) of any disappearing party to the merger provide substantially
that the making and filing of the agreement of merger vests in the
surviving party to the merger all the real property of any
disappearing party to the merger, the filing for record in the office
of the county recorder of any county in this state in which any of
the real property of the disappearing party to the merger is located
of either (a) a certificate prescribed by the Secretary of State, or
(b) a copy of the agreement of merger or certificate of merger,
certified by the Secretary of State or an authorized public official
of the state or place pursuant to the laws of which the merger is
effected, shall evidence record ownership in the surviving party to
the merger of all interest of the disappearing party to the merger in
and to the real property located in that county.
  SEC. 25.6.  Section 12552 of the Corporations Code is amended to
read:
   12552.  Any bequest, devise, gift, grant, or promise contained in
a will or other instrument of donation, subscription, or conveyance,
which is made to a constituent corporation and which takes effect or
remains payable after the merger, inures to the surviving party to
the merger.
  SEC. 26.  Section 15679.1 of the Corporations Code is amended to
read:
   15679.1.  (a) For purposes of this article, "reorganization"
refers to any of the following:
   (1) A merger pursuant to Article 7.5 (commencing with Section
15678.1).
   (2) The acquisition by one limited partnership in exchange, in
whole or in part, for its partnership interests (or the partnership
interests or equity securities of a partnership or other business
entity that is in control of the acquiring limited partnership) of
partnership interests or equity securities of another limited
partnership or other business entity if, immediately after the
acquisition, the acquiring limited partnership has control of the
other limited partnership or other business entity.
   (3) The acquisition by one limited partnership in exchange, in
whole or in part, for its partnership interests (or the partnership
interests or equity securities of a partnership or other business
entity which is in control of the acquiring limited partnership) or
for its debt securities (or debt securities of a limited partnership
or other business entity which is in control of the acquiring limited
partnership) which are not adequately secured and which have a
maturity date in excess of five years after the consummation of the
acquisition, or both, of all or substantially all of the assets of
another limited partnership or other business entity.
   (b) For purposes of this article, "control" means the possession,
direct or indirect, of the power to direct or cause the direction of
the management and policies of a limited partnership or other
business entity.
  SEC. 26.5.  Section 15679.1 of the Corporations Code is amended to
read:
   15679.1.  (a) For purposes of this article, "reorganization"
refers to any of the following:
   (1) A conversion pursuant to Article 7.4 (commencing with Section
15677.1).
   (2) A merger pursuant to Article 7.5 (commencing with Section
15678.1).
   (3) The acquisition by one limited partnership in exchange, in
whole or in part, for its partnership interests (or the partnership
interests or equity securities of a partnership or other business
entity that is in control of the acquiring limited partnership) of
partnership interests or equity securities of another limited
partnership or other business entity if, immediately after the
acquisition, the acquiring limited partnership has control of the
other limited partnership or other business entity.
   (4) The acquisition by one limited partnership in exchange in
whole or in part for its partnership interests (or the partnership
interests or equity securities of a partnership or other business
entity which is in control of the acquiring limited partnership) or
for its debts securities (or debt securities of a limited partnership
or other business entity which is in control of the acquiring
limited partnership) which are not adequately secured and which have
a maturity date in excess of five years after the consummation of the
acquisition, or both, of all or substantially all of the assets of
another limited partnership or other business entity.
   (b) For purposes of this article, "control" means the possession,
direct or indirect, of the power to direct or cause the direction of
the management and policies of a limited partnership or other
business entity.
  SEC. 27.  Section 16901 of the Corporations Code is amended to
read:
   16901.  In this article, the following terms have the following
meanings:
   (1) "Constituent other business entity" means any other business
entity that is merged with or into one or more partnerships and
includes a surviving other business entity.
   (2) "Constituent partnership" means a partnership that is merged
with or into one or more other partnerships or other business
entities and includes a surviving partnership.
   (3) "Disappearing other business entity" means a constituent other
business entity that is not the surviving other business entity.
   (4) "Disappearing partnership" means a constituent partnership
that is not the surviving partnership.
   (5) "Domestic" means organized under the laws of this state when
used in relation to any partnership, other business entity, or person
(other than an individual).
   (6) "Foreign other business entity" means any other business
entity formed under the laws of any state other than this state or
under the laws of the United States or of a foreign country.
   (7) "Foreign partnership" means a partnership formed under the
laws of any state other than this state or under the laws of a
foreign country.
   (8)  "General partner" means a partner in a partnership and a
general partner in a limited partnership.
   (9) "Limited liability company" means a limited liability company
created under Title 2.5 (commencing with Section 17000), or
comparable law of another jurisdiction.
   (10) "Limited partner" means a limited partner in a limited
partnership.
   (11) "Limited partnership" means a limited partnership created
under Chapter 3 (commencing with Section 15611), predecessor law, or
comparable law of another jurisdiction.
   (12) "Other business entity" means a limited partnership, limited
liability company, corporation, business trust, real estate
investment trust, or an unincorporated association (other than a
nonprofit association), but excluding a partnership.
   (13) "Partner" includes both a general partner and a limited
partner.
   (14) "Surviving other business entity" means an other business
entity into which one or more partnerships are merged.
   (15) "Surviving partnership" means a partnership into which one or
more other partnerships or other business entities are merged.
  SEC. 28.  Section 16911 of the Corporations Code is amended to
read:
   16911.  (a) Each partnership and other business entity which
desires to merge shall approve an agreement of merger.  The agreement
of merger shall be approved by the number or percentage of partners
specified for merger in the partnership agreement of the constituent
partnership.  If the partnership agreement fails to specify the
required partner approval for merger of the constituent partnership,
then the agreement of merger shall be approved by that number or
percentage of partners specified by the partnership agreement to
approve an amendment to the partnership agreement.  However, if the
merger effects a change for which the partnership agreement requires
a greater number or percentage of partners than that required to
amend the partnership agreement, then the merger shall be approved by
that greater number or percentage.  If the partnership agreement
contains no provision specifying the vote required to amend the
partnership agreement, then the agreement of merger must be approved
by all the partners.  The agreement of merger shall be approved on
behalf of each constituent other business entity by those persons
required to approve the merger by the laws under which it is
organized.  Other persons may be parties to the agreement of merger.
The agreement of merger shall state all of the following:
   (1) The terms and conditions of the merger.
   (2) The name and place of organization of the surviving
partnership or surviving other business entity, and of each
disappearing partnership and disappearing other business entity, and
the agreement of merger may change the name of the surviving
partnership, which new name may be the same as, or similar to, the
name of a disappearing partnership.
   (3) The manner of converting the partnership interests of each of
the constituent partnerships into interests or other securities of
the surviving partnership or surviving other business entity, and if
partnership interests of any of the constituent partnerships are not
to be converted solely into interest or other securities of the
surviving partnership or surviving other business entity, the cash,
property, rights, interests, or securities which the holders of the
partnership interest are to receive in exchange for the partnership
interests, which cash, property, rights, interests, or securities may
be in addition to or in lieu of interests or other securities of the
surviving partnership or surviving other business entity, or that
the partnership interests are canceled without consideration.
   (4) Any other details or provisions as are required by the laws
under which any constituent other business entity is organized.
   (5) Any other details or provisions that are desired, including,
without limitation, a provision for the treatment of fractional
partnership interests.
   (b) If the partnership is merging into a limited partnership, then
in addition to the approval of the partners as set forth under
subdivision (a), the agreement of merger must be approved by all
partners who will become general partners of the surviving limited
partnership upon the effectiveness of the merger.
   (c) Notwithstanding its prior approval, an agreement of merger may
be amended before the merger takes effect if the amendment is
approved by the partners of each constituent partnership, in the same
manner as required for approval of the original agreement of merger,
and by each of the constituent other business entities.
   (d) The partners of a constituent partnership may in their
discretion, abandon a merger, subject to the contractual rights, if
any, of third parties, including other constituent partnerships and
constituent other business entities, if the abandonment is approved
by the partners of the constituent partnership in the same manner as
required for approval of the original agreement of merger.
   (e) An agreement of merger approved in accordance with subdivision
(a) may (1) effect any amendment to the partnership agreement of any
domestic constituent partnership or (2) effect the adoption of a new
partnership agreement for a domestic constituent partnership if it
is the surviving
partnership in the merger.  Any amendment to a partnership agreement
or adoption of a new partnership agreement made pursuant to the
foregoing sentence shall be effective at the effective time or date
of the merger.
   (f) The surviving partnership or surviving other business entity
shall keep the agreement of merger at the principal place of business
of the surviving entity if the surviving entity is a partnership or
a foreign other business entity, at the office referred to in Section
1500 if the surviving entity is a domestic corporation, at the
office referred to in subdivision (a) of Section 15614 if the
surviving entity is a domestic limited partnership or at the office
referred to in Section 17057 if the surviving entity is a domestic
limited liability company and, upon the request of a partner of a
constituent partnership or a holder of interests or other securities
of a constituent other business entity, the authorized person on
behalf of the partnership or the surviving other business entity
shall promptly deliver to the partner or the holder of interests or
other securities, at the expense of the surviving partnership or
surviving other business entity, a copy of the agreement of merger.
A waiver by a partner or holder of interests or other securities of
the rights provided in this subdivision shall be unenforceable.
  SEC. 29.  Section 16914 of the Corporations Code is amended to
read:
   16914.  (a) When a merger takes effect, all of the following
apply:
   (1) The separate existence of the disappearing partnerships and
disappearing other business entities ceases and the surviving
partnership or surviving other business entity shall succeed, without
other transfer, act or deed, to all the rights and property whether
real, personal, or mixed, of each of the disappearing partnerships
and disappearing other business entities and shall be subject to all
the debts and liabilities of each in the same manner as if the
surviving partnership or surviving other business entity had itself
incurred them.
   (2) All rights of creditors and all liens upon the property of
each of the constituent partnerships and constituent other business
entities shall be preserved unimpaired and may be enforced against
the surviving partnership or the surviving other business entity to
the same extent as if the debt, liability or duty that gave rise to
that lien had been incurred or contracted by it, provided that those
liens upon the property of a disappearing partnership or disappearing
other business entity shall be limited to the property affected
thereby immediately prior to the time the merger is effective.
   (3) Any action or proceeding pending by or against any
disappearing partnership or disappearing other business entity may be
prosecuted to judgment, which shall bind the surviving partnership
or surviving other business entity, or the surviving partnership or
surviving other business entity may be proceeded against or be
substituted in the disappearing partnership's or the disappearing
other business entity's place.
   (b) (1) Unless a certificate of merger has been filed to effect
the merger, the surviving entity shall promptly notify the Secretary
of State of the mailing address of its agent for service of process,
its chief executive office, and of any change of address.  To enforce
an obligation of a limited partnership that has merged with a
foreign entity, the Secretary of State shall only be the agent for
service of process in an action or proceeding against the surviving
foreign other business entity, if the agent designated for the
service of process for the entity is a natural person and cannot be
found with due diligence or if the agent is a corporation and no
person, to whom delivery may be made, can be found with due
diligence, or if no agent has been designated and if no one of the
officers, partners, managers, members, or agents of the entity can be
found after diligent search, and it is so shown by affidavit to the
satisfaction of the court.  The court then may make an order that
service be made by personal delivery to the Secretary of State or to
an assistant or deputy Secretary of State of two copies of the
process together with two copies of the order, and the order shall
set forth an address to which the process shall be sent by the
Secretary of State.  Service in this manner is deemed complete on the
10th day after delivery of the process to the Secretary of State.
   (2) Upon receipt of the process and order and the fee set forth in
Section 12206 of the Government Code, the Secretary of State shall
give notice to the entity of the service of the process by forwarding
by certified mail, return receipt requested, a copy of the process
and order to the address specified in the order.
   (3) The Secretary of State shall keep a record of all process
served upon the Secretary of State and shall record therein the time
of service and the Secretary of State's action with respect thereto.
The certificate of the Secretary of State, under the Secretary of
State's official seal, certifying to the receipt of process, the
giving of notice thereof to the entity, and the forwarding of the
process, shall be competent and prima facie evidence of the matters
stated therein.
   (c) A partner of the surviving partnership or surviving limited
partnership, a member of the surviving limited liability company, a
shareholder of the surviving corporation, or a holder of equity
securities of the surviving other business entity, is liable for all
of the following:
   (1) All obligations of a party to the merger for which that person
was personally liable before the merger.
   (2) All other obligations of the surviving entity incurred before
the merger by a party to the merger, but those obligations may be
satisfied only out of property of the entity.
   (3) All obligations of the surviving entity incurred after the
merger takes effect, but those obligations may be satisfied only out
of property of the entity if that person is a limited partner, a
shareholder in a corporation, or, unless expressly provided otherwise
in the articles of organization or other constituent documents, a
member of a limited liability company or a holder of equity
securities in a surviving other business entity.
   (d) If the obligations incurred before the merger by a party to
the merger are not satisfied out of the property of the surviving
partnership or surviving other business entity, the general partners
of that party immediately before the effective date of the merger, to
the extent that party was a partnership or a limited partnership,
shall contribute the amount necessary to satisfy that party's
obligations to the surviving entity, in the manner provided in
Section 16807 or in the limited partnership act of the jurisdiction
in which the party was formed, as the case may be, as if the merged
party were dissolved.
   (e) A partner of a domestic disappearing partnership, who does not
vote in favor of the merger and does not agree to become a partner,
member, shareholder, or holder of interest or equity securities of
the surviving partnership or surviving other business entity shall
have the right to dissociate from the partnership, as of the date the
merger takes effect.  Within 10 days after the approval of the
merger by the partners as required under this article, each domestic
disappearing partnership shall send notice of the approval of the
merger to each partner that has not approved the merger, accompanied
by a copy of Section 16701 and a brief description of the procedure
to be followed under that section if the partner wishes to dissociate
from the partnership.  A partner that desires to dissociate from a
disappearing partnership shall send written notice of that
dissociation within 30 days after the date of the notice of the
approval of the merger.  The disappearing partnership shall cause the
partner's interest in the entity to be purchased under Section
16701.  The surviving entity is bound under Section 16702 by an act
of a general partner dissociated under this subdivision, and the
partner is liable under Section 16703 for transactions entered into
by the surviving entity after the merger takes effect.  The
disassociation of a partner in connection with a merger pursuant to
the terms of this subdivision shall not be deemed a wrongful
disassociation under Section 16602.
  SEC. 30.  Section 16915 of the Corporations Code is amended to
read:
   16915.  (a) In a merger involving only partnerships, or in a
merger to which a domestic partnership and an other business entity
is a party but in which no other domestic other business entity is a
party, the surviving partnership or surviving foreign other business
entity may file with the Secretary of State a statement that one or
more partnerships have merged into the surviving partnership or
surviving other business entity.  A statement of merger shall contain
the following:
   (1) The name of each partnership or other business entity that is
a party to the merger.
   (2) The name of the surviving entity into which the other
partnerships or other business entities were merged.
   (3) The street address of the surviving entity's chief executive
office and of an office in this state, if any.
   (4) Whether the surviving entity is a partnership or an other
business entity, specifying the type of the entity.
   (b) In a merger involving a domestic partnership in which a
domestic other business entity is also a party, after approval of the
merger by the constituent partnerships and any constituent other
business entities, the constituent partnerships and constituent other
business entities shall file a certificate of merger in the office
of, and on a form prescribed by, the Secretary of State, but if the
surviving entity is a domestic corporation or a foreign corporation
in a merger in which a domestic corporation is a constituent party,
the surviving corporation shall file in the office of the Secretary
of State a copy of the agreement of merger and attachments required
under paragraph (1) of subdivision (g) of Section 1113.  The
certificate of merger shall be executed and acknowledged by each
domestic constituent partnership by two partners (unless a lesser
number is provided in the partnership agreement) and by each foreign
constituent partnership by one or more partners, and by each
constituent other business entity by those persons required to
execute the certificate of merger by the laws under which the
constituent other business entity is organized.  The certificate of
merger shall set forth all of the following:
   (1) The names and the Secretary of State's file numbers, if any,
of each of the constituent partnerships and constituent other
business entities, separately identifying the disappearing
partnerships and disappearing other business entities and the
surviving partnership or surviving other business entity.
   (2) If a vote of the partners was required under Section 16911, a
statement that the principal terms of the agreement of merger were
approved by a vote of the partners, which equaled or exceeded the
vote required.
   (3) If the surviving entity is a domestic partnership and not an
other business entity, any change to the information set forth in any
filed statement of partnership authority of the surviving
partnership resulting from the merger, including any change in the
name of the surviving partnership resulting from the merger.  The
filing of a certificate of merger setting forth any changes to any
filed statement of partnership authority of the surviving partnership
shall have the effect of the filing of a certificate of amendment of
the statement of partnership authority by the surviving partnership,
and the surviving partnership need not file a certificate of
amendment under Section 16015 to reflect those changes.
   (4) The future effective date or time (which shall be a date or
time certain not more than 90 days subsequent to the date of filing)
of the merger, if the merger is not to be effective upon the filing
of the certificate of merger with the office of the Secretary of
State.
   (5) If the surviving entity is an other business entity or a
foreign partnership, the full name, type of entity, legal
jurisdiction in which the entity was organized and by whose laws its
internal affairs are governed, and the address of the principal place
of business of the entity.
   (6) Any other information required to be stated in the certificate
of merger by the laws under which each constituent other business
entity is organized.
   (c) A statement of merger or a certificate of merger, as is
applicable under subdivision (a) or (b), shall have the effect of the
filing of a cancellation for each disappearing partnership of any
statement of partnership authority filed by it.
  SEC. 31.  Section 16916 of the Corporations Code is amended to
read:
   16916.  (a) Whenever a domestic or foreign partnership or other
business entity having any real property in this state merges with
another partnership or other business entity pursuant to the laws of
this state or of the state or place in which any constituent
partnership or constituent other business entity was organized, and
the laws of the state or place of organization (including this state)
of any disappearing partnership or disappearing other business
entity provide substantially that the making and filing of a
statement of merger, agreement of merger or certificate of merger
vests in the surviving partnership or surviving other business entity
all the real property of any disappearing partnership and
disappearing other business entity, the filing for record in the
office of the county record of any county in this state in which any
of the real property of the disappearing partnership or disappearing
other business entity is located of either (1) a certificate of
merger or agreement of merger certified by the Secretary of State, or
other certificate prescribed by the Secretary of State, or (2) a
copy of the statement of merger, agreement of merger or certificate
of merger, certified by the Secretary of State or an authorized
public official of the state or place pursuant to the laws of which
the merger is effected, shall evidence record ownership in the
surviving partnership or surviving other business entity of all
interest of that disappearing partnership or disappearing other
business entity in and to the real property located in that county.
   (b) A filed and, if appropriate, recorded statement of merger,
executed and declared to be accurate pursuant to subdivision (c) of
Section 16105, stating the name of a partnership or other business
entity that is a party to the merger in whose name property was held
before the merger and the name of the surviving entity, but not
containing all of the other information required by Section 16915,
operates with respect to the partnerships or other business entities
named to the extent provided in subdivision (a).
   (c) Recording of the certificate of merger in accordance with
subdivision (a) shall create, in favor of bona fide purchasers or
encumbrancers for value, a conclusive presumption that the merger was
validly completed.
  SEC. 32.  Section 17600 of the Corporations Code is amended to
read:
   17600.  (a) For purposes of this chapter, "reorganization" refers
to any of the following:
   (1) A merger pursuant to Chapter 12 (commencing with Section
17550).
   (2) The acquisition by one limited liability company, in exchange,
in whole or in part, for its membership interests (or the membership
interests or equity securities of a limited liability company or
other business entity that is in control of the acquiring limited
liability company), of membership interests or equity securities of
another limited liability company or other business entity if,
immediately after the acquisition, the acquiring limited liability
company has control of the other limited liability company or other
business entity.
   (3) The acquisition by one limited liability company in exchange
in whole or in part for its membership interests (or the membership
interests or equity securities of a limited liability company or
other business entity that is in control of the acquiring limited
liability company) or for its debt securities (or debt securities of
a limited liability company or other business entity that is in
control of the acquiring limited liability company) that are not
adequately secured and that have a maturity date in excess of five
years after the consummation of the acquisition, or both, of all or
substantially all of the assets of another limited liability company
or other business entity.
   (b) For purposes of this chapter, "control" means the possession,
direct or indirect, of the power to direct or cause the direction of
the management and policies of a limited liability company or other
business entity.
  SEC. 32.5.  Section 17600 of the Corporations Code is amended to
read:
   17600.  (a) For purposes of this chapter, "reorganization" refers
to any of the following:
   (1) A conversion pursuant to Chapter 11.5 (commencing with Section
17540.1).
   (2) A merger pursuant to Chapter 12 (commencing with Section
17550).
   (3) The acquisition by one limited liability company in exchange,
in whole or in part, for its membership interests (or the membership
interests or equity securities of a limited liability company or
other business entity that is in control of the acquiring limited
liability company), of membership interests or equity securities of
another limited liability company or other business entity if,
immediately after the acquisition, the acquiring limited liability
company has control of the other limited liability company or other
business entity.
   (4) The acquisition by one limited liability company in exchange
in whole or in part for its membership interests (or the membership
interests or equity securities of a limited liability company or
other business entity that is in control of the acquiring limited
liability company) or for its debt securities (or debt securities of
a limited liability company or other business entity that is in
control of the acquiring limited liability company) that are not
adequately secured and that have a maturity date in excess of five
years after the consummation of the acquisition, or both, of all or
substantially all of the assets of another limited liability company
or other business entity.
   (b) For purposes of this chapter, "control" means the possession,
direct or indirect, of the power to direct or cause the direction of
the management and policies of a limited liability company or other
business entity.
  SEC. 33.  Section 26.5 of this bill incorporates amendments to
Section 15679.1 of the Corporations Code proposed by both this bill
and AB 197.  It shall only become operative if (1) both bills are
enacted and become effective on or before January 1, 2000, (2) each
bill amends Section 15679.1 of the Corporations Code, and (3) this
bill is enacted after AB 197, in which case Section 26 of this bill
shall not become operative.
  SEC. 34.  Section 32.5 of this bill incorporates amendments to
Section 17600 of the Corporations Code proposed by both this bill and
AB 197.  It shall only become operative if (1) both bills are
enacted and become effective on or before January 1, 2000, (2) each
bill amends Section 17600 of the Corporations Code, and (3) this bill
is enacted after AB 197, in which case Section 32 of this bill shall
not become operative.
